Business Report 2005 - Interseroh

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The domestic economy did not have any serious effects on the volumes of EPS (polystyrene) marketed. They were kept at the previous year’s level. The prices for this raw material developed like those for plastic. Increased expenditure on transport due to toll payments was offset completely. INTERSEROH Kunststoffaufbereitung GmbH in Aschersleben has fulfilled the expectations placed in it and is on a growth course. It manufactures and then markets regranulates from EPS. Aschersleben is located at the intersection of the important industrial regions of Halle/Leipzig, Magdeburg, Bitterfeld and Berlin and therefore offers substantial logistical advantages. 4. Steel and Metal Recycling: Declining Crude Steel Production Reduces Volumes The year 2005 was again characterised by extreme volatility in scrap steel prices. Following true booms in prices to October 2004, the decline in scrap steel prices continued from the end of 2004 to June 2005. Many European steelworks cut back their production in order to prop up steel prices. The demand for steel weakened, stocks were still well-filled. This decline in demand coincided with still relatively high scrap steel supply, especially from Russia and the Ukraine. Scrap steel prices rose in July and August. In the months thereafter they dropped slightly to the end of 2005. The reduction in the demand for scrap steel also diminished the tonnage marketed by INTERSEROH. Due to the declines in prices, activities in direct sale business, where margins are comparatively weak, were reduced in favour of warehouse business, where margins are higher. Direct sale business where margins were too low were given up completely. Due to the strong demand for also older used vehicles and the lack of harmonisation in dumping legislation in Europe (see also section 1. B), the number of car bodies in Germany dropped. Nevertheless, INTERSEROH’s processing capacities are largely being used to the full. The sites were modernised with extensive investments in shredder technology to meet the requirements of the Technical Instructions for Domestic Waste. For example, INTERSEROH Jade-Stahl in Wilhelmshaven and INTERSEROH MAB Rostock invested in a new non-ferrous metal and shredder light fraction separation plant respectively. A new fine dust filter plant was installed at INTERSEROH Evert Heeren in Leer. The tonnage of non-ferrous metals was increased. In keeping with the concentration tendencies on the buyer side, the INTERSEROH Group expanded its market position and therefore competitiveness in the steel and metal recycling segment further. The company “Franz Jungnickel” in Marktredwitz / Bavaria was bought in an asset deal. Apart from steel and metal scrap, it also recycles paper and plastics. It has been merged into INTERSEROH Franken Rohstoff GmbH, Sennfeld. The activities of the company “Serog H. Suhrbier GmbH” in Bous / Saarland were also bought in an asset deal. It will operate in future under the name of INTERSEROH Serog GmbH. The two acquisitions have further improved INTERSEROH’s coverage for the collection and processing of these materials. INTERSEROH is now ranked second among German scrap processors. On 1 July 2005 INTERSEROH also acquired a 70-percent interest in RHS Rohstoff Handel GmbH in Stuttgart. This has strengthened activities in the trading of non-ferrous metals even further. These three acquisitions brought a total of almost 150,000 annual tons of steel and metal scrap into the group. The subsidiary INTERSEROH Hetzel GmbH began moving from Heidelberg to the harbour in Mannheim towards the end of the year under review. The move should be complete in autumn 2006. Hetzel will then operate one of the most modern recycling plants in Germany. Due to the strong demand in Eastern Europe for old cars and relocation of labour-intensive production to these countries, the amount of scrap steel being generated there is also rising. It is therefore INTERSEROH’s strategy to increase its presence in these countries. Our associated company in Szczecin in Poland, TOM, increased its presence with four additional sites. With 10 sites, TOM is now the market leader in Western Poland. A new company was established in St. Petersburg, Russia, at the end of 2005. 16
Secondary raw materials 2004/2005 including steel and metal recycling 2004 2005 Total volume in t Total volume in t Wastepaper 1,119,400 1,104,900 Old wood 635,400 649,700 Plastics 106,100 123,900 Kraft paper bags 14,800 15,800 Scrap metal 109,400 134,600 Scrap steel 3,650,700 3,127,600 Composites 49,600 27,900 Other secondary raw materials 16,700 14,100 5. Investments Up The current investments for the financial year totalled EUR 28.07 million (previous year: EUR 13.64 million), consisting mostly of accruals to property, plants and equipment at EUR 21.91 million (previous year: EUR 12.29 million), especially land and buildings at EUR 4.34 million, technical equipment and machinery at EUR 4.95 million and other facilities, fittings and equipment at EUR 4.66 million. Advances to suppliers and investments in construction amounted to EUR 7.97 million, primarily for alterations to various sites and the construction of large mechanical plants. The accruals to intangible assets totalled EUR 3.84 million, mainly for the costs of EUR 1.57 million incurred by the closing date for software that is to be introduced group-wide and goodwill of EUR 1.55 million. The accruals to at-equity participations of EUR 0.2 million resulted from the transformation of a shareholder’s loan to equity. Investments in the field of long-term financial assets mounted to EUR 2.12 million in the year under review. Contained in this amount are EUR 0.95 million as the share of a group company not yet consolidated as of 31 December 2005. Also included are accruals in the field of long-term loans to affiliated and associated companies not yet consolidated and to external third parties totalling EUR 1.01 million. The services and raw materials segment accounted for EUR 14.19 million of the current investments. The investments in intangible assets of EUR 1.94 million went primarily on the implementation of new software, for which advances of EUR 1.36 million were paid in 2005. A total of EUR 10.44 million was invested in fixed assets. The accruals in the field of fixed assets fell mainly on advances to suppliers and investments in construction of EUR 5.47 million, of which EUR 4.89 million were spent on alterations to a site belonging to INTERSEROH Holzkontor NRW and on technical equipment and machinery as well as other facilities, fittings and equipment at EUR 3.08 million and EUR 1.84 million respectively. The accruals in the field of long-term financial assets of EUR 1.80 million comprised mainly the purchase of the shares of a subsidiary company not consolidated in 2005 (EUR 0.95 million), longterm loans to unconsolidated affiliated companies (EUR 0.40 million) and long-term loans to external third parties (EUR 0.38 million). The steel and metal recycling segment accounted for EUR 13.88 million. The accruals in intangible assets of EUR 1.81 million comprised mainly goodwill of EUR 1.47 million resulting from the acquisition of three metal recycling plants and the costs of EUR 0.21 million for the implementation of new software. A total of EUR 11.47 million was invested in property, plants and equipment, EUR 4.29 million of which in land and buildings, EUR 1.86 million in technical equipment and machinery as well as EUR 2.82 million in other facilities, fittings and equipment. The advances to suppliers and investments in construction totalling EUR 2.50 million were spent primarily on two scrap cutters and a recycling plant. The accruals in the field of long-term financial assets of EUR 0.40 million comprised mainly long-term loans to associated companies at EUR 0.23 million. 17
Page 1 and 2: 2005 BUSINESS REPORT INTERSEROH AG
Page 3 and 4: KEY GROUP FIGURES Group 2005 * 2004
Page 5 and 6: CONTENTS Key Figures 3 The Manageme
Page 7 and 8: undiminished resolve and work with
Page 9 and 10: Corporate Governance The Supervisor
Page 11 and 12: financial year and years before who
Page 13 and 14: 2. Business in Services Expanded; P
Page 15: 3. Raw Materials Trading Under One
Page 19 and 20: INTERSEROH Wins Top Job Third Time
Page 21 and 22: Praetorium 61. VV GmbH currently ho
Page 23 and 24: Formation of New Companies Formatio
Page 25 and 26: 2. Financial Position 31.12.2005 31
Page 27 and 28: 3. Key Consolidated Ratios in % Bal
Page 29 and 30: • organisational manual as bindin
Page 31 and 32: Since the services segment will con
Page 33 and 34: ANNUAL FINANCIAL STATEMENTS OF THE
Page 35 and 36: CONSOLIDATED NOTES FOR THE FINANCIA
Page 37 and 38: Current cash in banks or bank liabi
Page 39 and 40: According to IAS 39 (Financial Inst
Page 41 and 42: Notes on the Income Statement The c
Page 43 and 44: (8) Result from investment in assoc
Page 45 and 46: Notes on the Balance Sheet (12) Int
Page 47 and 48: The leased and capitalised assets i
Page 49 and 50: (15) Financial assets 2005 EUR mill
Page 51 and 52: The amounts named contain the follo
Page 53 and 54: The net liabilities developed as fo
Page 55 and 56: to the passage of time, the discoun
Page 57 and 58: Of the other liabilities, EUR 0.04
Page 59 and 60: The segments performed as follows i
Page 61 and 62: 2005 EUR million 2004 EUR million W
Page 63 and 64: (36) Management Board and Superviso
Page 65 and 66: Mr. Friedrich Merz, Arnsberg (since
Page 67 and 68:
(39) Events after the closing date
Page 69 and 70:
The book values of property, plants
Page 71 and 72:
In addition to this - and in contra
Page 73 and 74:
4. Praetorium 61. VV GmbH, Berlin,
Page 75 and 76:
Annex 1 Statement of Equity Changes
Page 77 and 78:
Annex 2 Consolidated Cash Flow Stat
Page 79:
Published by: INTERSEROH Aktiengese
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Business Report 2005 - Interseroh

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